A former high-ranking Los Angeles Building and Safety official who claimed he was fired after alleging fraudulent billing and other wrongdoing will receive a $3 million settlement from the city.
Steve Ongele had sued the city, alleging whistleblower retaliation after he was terminated from his job in 2019. For the prior six years, he had raised concerns about allegedly illegal and unethical practices at the Building and Safety department, according to the lawsuit.
In response, city officials repeatedly scaled back his duties and ultimately fired him, the suit claims.
The City Council voted 12 to 0 on Wednesday to approve the $3 million settlement. Councilmembers Monica Rodriguez, Kevin de León and Curren Price were absent.
Ongele’s attorney, Greg Smith, declined to comment. A representative for City Atty. Hydee Feldstein Soto didn’t immediately provide comment.
The $3 million settlement follows a string of scandals at the Building and Safety department. A one-time building inspector was sentenced to two and a half years in prison in 2014 following a federal investigation into bribe-taking.
In 2018, several employees in the department’s technology services bureau resigned amid an internal investigation into unauthorized purchases and falsified invoices. That investigation also revealed that some employees were subjected to unusual forms of punishment by their immediate supervisor, including eating an entire pizza within a short period of time, according to a personnel report prepared by the city.
Ongele served as chief of the Building and Safety department’s Resource and Management Bureau, overseeing contracts, purchase orders and fees.
In 2017, he questioned a nearly $300-million surplus that was the result of the department overcharging its customers, including the federal government, according to the lawsuit. Then-general manager Frank Bush didn’t take action, the lawsuit alleged.
Bush, who has since left the department, has previously denied Ongele’s claims.
A few years earlier, Ongele told the then-executive officer, Raymond Chan, that the department was collecting more fees than it was spending. Studies needed to be done to ensure the fees were justified and the city wasn’t violating the law, Ongele claimed in the lawsuit.
In response, Chan put his hands up in the air and replied, “Arrest me,” according to the lawsuit.
Chan was found guilty earlier this year in an unrelated federal criminal case involving former City Councilman Jose Huizar and downtown real estate developers. Chan was sentenced last week to 12 years in prison on racketeering conspiracy, bribery, fraud and other charges.
An attorney for Chan didn’t respond for a request for comment Wednesday about the claims in Ongele’s lawsuit.
Ongele, who joined the city in 2000, also alleged in his lawsuit that a person who was friends with Chan submitted a claim for a refund of more than $160,000 for work done for several buildings.
Ongele refused to approve the claim because it did not meet the requirements for a refund. It was later approved by another building department executive, who told Ongele, “This is for Ray’s friends,” or words to that effect, the lawsuit alleged.
In 2016, Chan became deputy mayor for business development under then-Mayor Eric Garcetti. Chan then sought money from the Building and Safety department for raises for his staff as well as new furniture and computers for the mayor’s office.
That money was taken from special funds meant to be used only for activities related to building permits and plan checks, according to Ongele’s lawsuit.
Ongele also alleged in the lawsuit that in 2016, he learned that several employees at the building department had been paid overtime illegally over multiple years. Ongele reported the information to Bush and “insisted that the employees refund the money,” according to the lawsuit.
Ongele complained to city council deputies and aides to then-Mayor Eric Garcetti after he spoke out and his job duties were reduced, but nothing was done, his lawsuit claimed.
Meanwhile, Ongele was also sidelined during the 2018 internal investigation into the purchases and invoices, according to the lawsuit.
When he tried to disclose the fraud, which amounted to about $4 million, to the City Controller’s Office, he was instructed by his supervisor to state that only $300,000 was misappropriated, the lawsuit said.
In 2018, the L.A. County District Attorney’s Office also opened an investigation into the allegations. A spokesperson for the district attorney didn’t immediately provide comment on Wednesday about the status of the investigation.
